Archive for May, 2008

Rapid growth and social justice

May 29, 2008

Every year before the announcement of annual federal budget, plethora of tax proposals are received by the Federal Board of Revenue (FBR) from trade and professional bodies, tax bars and industry’s representatives. These are hardly given serious thought by the tax managers, who have only one concern: how to achieve revenue targets through wickedly drafted amendments and onerous tax regulations.

 

Taxation should serve as a catalyst for industrial expansion and economic growth. In Pakistan the ill-directed, illogical, regressive and unfair tax regulations for the last many years have caused a dampening effect on the industrial and business growth.. Had the successive governments concentrated on economic growth and industrial expansion, there would have been consequential substantial rise in taxes today. It is impossible to enhance revenues with stagnation in economy, and over-taxing such economy, as has been done in Pakistan, can destroy the revenue system as well. This is a vicious circle in which our policymakers are now trapped. They will have to find ways and means to come out of this tangle to make Pakistan a competitive place where investors find satisfactory conditions to live and invest. In a country where there is no security of life or property, notwithstanding the availability of host of tax benefits and other incentives, investors will never come forward.

 

It is a curious paradox of our situation that while money for worthwhile industrial and business growth and public benefits is scare, there is colossal unaccounted cash supply circulating in the economy in search of further undercover gains. What is more tragic is that this social evil inherent in tax system gets doubly compounded as it necessitates greater and greater tax burdens on those who are law-abiding. The most crucial problem faced by us in fiscal reform programme is that of devising astute and stringent measures to curb tax evasion so that we can distribute the burden of taxes fairly and justly between different persons in the same or similar walks of life. The honest taxpayers have to be safeguarded as day by day they are being disillusioned by the fact that tax evaders are not paying anything with the connivance of their friends and mentors in tax machinery. The unholy alliance between the tax evaders and corrupt tax officials has to be eliminated as a first and the foremost step if we want to initiate any meaningful change in tax system and achieve the goal of rapid economic growth.

 

Every now and then the State announces a tax immensity scheme that favours tax evaders, smugglers, corrupt, extortionists, drug barons and criminals. Such schemes are a spank for the honest taxpayers [proving them the most foolish for paying the taxes]. An extortionist in Karachi can decriminalize his ill gotten money through such a scheme but the poor businessman who paid it due to shameless failure or connivance of law enforcement apparatus cannot even claim it as an expense in his tax return! The situation needs to be corrected. The facilitation of whitening the untaxed money should be restricted ONLY for genuine businessmen to bring such capital back into disclosed/formal sector by paying some percentage as tax (as kafara) and not for the criminals, corrupt and unscrupulous elements in society.

 

There is a national consensus that existing tax policy needs to be reformulated to provide an equitable, pragmatic, investment-oriented and business-friendly tax system, integrating good tax administration with simplified tax laws that are easily to be understood and hassle-free from implementation perspectives. In the absence of a well-designed tax policy, the agenda of tax reform will remain lopsided. The new government should get itself free from the figure game of the FBR. Our tax potential is not less than Rs. two trillion provided the tax base is made wider and equitable, tax machinery is completely overhauled and exemptions and concessions available to the privileged sections of society are withdrawn. The following steps are inevitable if we want to make Pakistan a competitive place in today’s world:

 

1.      Establishment  of democratic institutions both in form and substance coupled with a truly independent justice system.

2.      Dispensation of justice without delay should be the top most priority of the State.

3.      Revamping of entire education system and ensuring revolutionary measure to take society out of jahalat [ignorance]. Our problem is not only illiteracy but also ignorance. Even the so-called literates are jahil of worst order, as they do not demonstrate by their actions any norms of a civilized society. The foremost stress should be on Iqra [knowledge] and technological advances.

4.      Elimination of bigotry, religious intolerance and violence by taking concrete measures to ensure social development of society based on higher values of life and humanity.

5.      Devising long-term and short-term strategies to break the shackles of debt-trap.

6.      Determination and political will to control wasteful, non-developmental and defence expenditure.

7.      Strict laws and their effective implementation to curb money laundering, plundering of national wealth, political write off of bank loans and leakages in revenue collections.

8.      Reform of technical, institutional and organizational dimensions of public finance.

9.      Improvement in public sector effectiveness.

10.  Reform and strengthening of management of public finances.

11.  Transparent public sector spending.

12.  Efficient public sector performance.

13.  Revitalization of tax machinery.

14.  Simplification of tax laws and procedures.

15.  Good governance and corrupt free government structures.

16.  Reduction in excessive marginal tax rates making them compatible with other tax jurisdictions of the world, especially in Asia.

17.  Substantial reduction in corporate rate of tax.

18.  Elimination of onerous tax and other regulations for corporate sector that are the main stumbling block for new direct foreign investments.

19.   Sufficient openness and accountability in the government to enable citizens to understand and participate fully in the process of national integration. This includes live telecast of the assembly proceedings.

20.  Complete transparency in government and private financial transactions.

The juxtaposition of economic policymaking and political reform [democratization] of society is necessary. The agenda for reform and survival should entail a comprehensive, well-integrated and unified plan that alone can assure its success. The reform in one sector ignoring the ills in the other, resorting to improving something at the cost of leaving aside the one interlinked, will not yield desired results. The case of tax reform divorced to elimination of black economy is the point in focus. The main cause of fiscal deficit is existence of an unprecedented size of underground economy and the share of incompetence and inefficient tax machinery is significant, but reform in tax administration alone without routing the causes of parallel economy is not going to improve GDP-tax ratio [which is below 10% for the last 10 years].

In the same manner mere constitutional changes giving more powers to Prime Minister will not improve the political culture. We cannot achieve the cherished goal of self-reliant Pakistan unless rule of law and democratic behaviour in practice is clearly demonstrated. In the presence of US-imposed and supported President, the goal of independent Pakistan free from the political clutches of Washington cannot be materialized. For a strong economy, resource mobilization through a growth-oriented tax policy is a prerequisite. Tax policy should induce rapid industrial growth, ensure equitable distribution of wealth and incomes and give the provinces due share in national resources and powers to levy taxes within their territorial jurisdictions.

One hopes that in the forthcoming budget, mindless and isolated changes will be avoided to further destroy our tax system unless tax policy imperatives discussed above are given due consideration. The change mania without proper direction can be counterproductive or even disastrous. This is what tax baboos of FBR have been doing for the last two decades.

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The writers, tax advisers, are visiting professors at Lahore University of management Sciences (LUMS). They can be reached through their website www.huzaimaikram.com

Stock Market Taxation

May 25, 2008

Huzaima Bukhari & Dr. Ikramul Haq

 

 

During the trading session on May 23, 2008, the Karachi Stock Exchange registered the highest single day loss surpassing the earlier figure of -635.80 (recorded on 05.11.2007) amid speculation that the index will fall even further. The Stock Exchange closed at -615 at 4.00pm. The downward trend is being attributed to increase in interest rates permitted by the State Bank of Pakistan and expected imposition of capital gain tax in the forthcoming Budget for the fiscal year 2008-2009. Each year, just before the announcement of the budget by the Finance Minister, a bearish trend is witnessed, but this year, despite there being a people’s elected political set-up, the situation is quite alarming, especially for small investors.

 

If the entire issue is revolving around the statement of Mr. Ishaq Dar reported on 13 May 2008 in Dawn newspaper under the title, “Several new taxes in budget, says Dar”, that there is a need to impose capital gain tax then for the awareness of the general public there already exists such a tax under section 37 of the Income Tax Ordinance, 2001 (hereinafter “the Ordinance”). Besides, section 233A of the Ordinance requires registered stock exchanges to collect advance tax from its members at the rate of 0.01% on sale/purchase of shares and trading of shares; and 10% in respect of financing of carryover trades in share business. Additionally, another tax known as Capital Value Tax which came into existence vide Finance Act 1989 is also in the field and is chargeable as per section 7 of the Act, on the capital value of purchase of modaraba certificates or a registered instrument of redeemable capital as defined in the Companies Ordinance, 1984, or shares of a public company listed on a registered stock exchange in Pakistan. 

 

Section 37 of the Ordinance explicitly speaks about a tax on gain arising on the disposal of capital asset that includes stocks and shares and such movable properties in personal use as a precious work of art, jewellery, rare manuscript, folio or book; a postage stamp or first day cover; a coin or a medallion; or an antique. No doubt, there are certain concessions with respect to assets retained for a period of more than one year and there are some exemptions on the gain of certain stocks and shares but this certainly does not imply that there is no capital gain tax in Pakistan. In fact, collections as reported up to June 2006 and June 2007 are as follows:

 

Head of Payment

June 2006

June 2007

u/s 233A

2,595.8 million

5,920.7 million

CVT on purchase of shares

1,440.3 million

2,238.5 million

 

The figures clearly speak of the amount of tax that is related to trading in stocks and shares. With these taxes already in existence, it is quite surprising that ex-Finance Minister was talking about levying capital gain tax! This clearly speaks of how ill-informed the members of our political parties are.

 

It is very strange that Chairman FBR has not explained the correct position and the prevalent impression that exemption is given to investors in the capital market has not been contradicted by the official quarters till today. On the one hand, stock market investors have contributed substantially towards revenue as evident from the above figures while on the other, they are being accused of enjoying some imaginary tax benefits.

 

The role of capital markets in development of economy like Pakistan needs no emphasis. This avenue provides great opportunities to small investors to earn dividends from scrips of good companies. The companies also strive hard to enhance the value of their scrips. This creates an atmosphere of confidence and a favourable investment environment. The growth and promotion of capital markets depend on political stability and any negative news badly affects its working. Speculators immediately take advantage of such panic. During the last many days due to all kinds of negative and alarming news in the media, the signals reaching the stock market are creating devastation. The main reason behind the crash is political uncertainty and expected clash between the Parliament and the President.

 

In fact Musharraf is singularly responsible for this chaos. He is repeatedly claiming to stick to the post for another five years despite the clear verdict of 18 February 2008. Even Zardari has declared him the main hurdle between the people and democracy. Its about time to save economy, stock markets and democracy in Pakistan by stabilizing the system. Our stock market has tremendous potential to grow provided that political forces give the nation assurance of cohesion, unity, peace and security.  

Benefitting the rich

May 25, 2008

Huzaima Bukhari & Dr. Ikramul Haq

 

 

“Loss leaves us empty – but learn not to close your heart and mind in grief. Allow life to replenish you. When sorrow comes it seems impossible – but new joys wait to fill the void.”

Pam Brown

 

 

Wealth Tax Act, 1963 was abolished through the Finance Act 2003 on specific demand of ex-Prime Minister-cum Finance Minister Shaukat Aziz before taking charge as Finance Minister of Pakistan. He being an intelligent man was fully aware of the fact that by virtue of his status as resident in Pakistan, his world assets would attract provisions of the Wealth Tax Act culminating into substantial tax liability on annual basis. After 9/11, since the country was in a “critical state” (as portrayed by Musharraf) where the services of one individual were totally indispensable, the repeal was shown to be justified despite tremendous revenue losses, and the resultant misery inflicted on the majority of the people of Pakistan.

 

Today, our financial wizards are talking about financial impediments inter alia fiscal deficit of 9 % of GDP and extra borrowing of over Rs. 5 billion, mercilessly wasted on the endless non-developmental expenditure, lavish perquisites of the ruling elite and to make good this loss, the only option in their view is raising the prices of oil (knowing very well that such raise triggers rise in cost of living pushing the poor strata further down the poverty line). Instead of resorting to recovering all losses from the poor and hapless of this country why is not any attempt being made to recover from those who are actually responsible, some being beneficiaries of loan write-offs? Is it because in doing so, they themselves will have to bear the burden as well?

 

In 2002 before its abolition, wealth tax was the only progressive tax left in Pakistan with tremendous potential for growth, if exemption given to the rich absentee landlords were scrapped. This became obvious immediately after its repeal when billions of rupees (estimated at US$ 60 billion) started pouring in from all over the world remitted by all and sundry without any fear of being investigated, courtesy amnesty given in section 111(4) of the Income Tax Ordinance, 2001.  Influx of enormous wealth was directed to the stock exchanges where the dominant stake-holders continued to gobble the small investors through unholy maneuverings; or was used to enhance real estate dealings. With no wealth tax to pay, both these avenues helped to increase individual wealth but dreadfully stripped the entire nation of its right to live in peace and economic prosperity.

 

This also soared up investments in non-productive sectors, with people refusing to take risks on industrial projects that could have proved more beneficial to the masses. The high tendency to make easy money through stock exchanges and land dealings has resulted in retardation of economic growth for the poor, whose life is totally dependent upon earning daily wages. The last five years have negatively flung Pakistan’s economic condition not just ten years back, but many decades. With marked rise in population, with no attempt to increase resources or even improve the existing ones, with the divide between the rich and poor touching dangerous levels, with continuous political turmoil and to top it all, reliance on an extremely regressive tax system, one can confidently say that our country is now on the threshold of economic collapse unless serious measures are not adopted to veer it off this perilous track.     

 

What is preventing our elected coalition government’s highly qualified finance ministry from recuperating billions of worth of taxes by restoring the Wealth Tax Act? Instead of increasing oil prices (where per litre tax component is over Rs. 25) why is there no attempt being made to impose heavy taxes on those who enjoying colossal wealth and enormous income do have the ability to pay?

 

Looking at the Press reports, it is disturbing to see that some of our retired generals are adjudged as the richest in the world by TIME magazine. Besides, our elected representatives in the past have proved that they are far better at asset and wealth management than fund managers and investment bankers of Pakistan. These people are extremely competent at creating personal wealth but prove utterly hopeless in increasing national wealth for now nearly 180 million people of this country. The rich Prime Minister-cum-Finance Minister did not establish any charitable institute by giving donation out of his mega wealth, nor are the present ones ready to do so. On the contrary, the National Police Foundation “allotted” two plots to him in E/11, Islamabad at throwaway prices of Rs. 1.1 million and Rs.0.24 million which, within a year’s time attained market price of Rs. 12.5 million and Rs. 1.5 million and in 2008 rising to thirty times the original price paid! Supreme leader of King’s party, PML(Q), Chaudhry Shujat Hussain, another exceptional wealth manager who pole-vaulted from net wealth of Rs. 74 million to Rs. 146 million in just 12 months (see his latest declaration before the Election Commission). These two examples are merely illustrative of the over-all pattern of phenomenal increase in the wealth of ruling elite: powerful civil-military complex, greedy politicians and unscrupulous businesspersons.

 

Over the last many years, tax policies have been formulated serving the interest of billionaires (including the ruling elite, wealthy generals and high-raking civil bureaucrats, industrialists and rich property owners) and that too at the expense of the poor.

 

  • In the last two years alone, revenue loss on account of income from property is estimated at Rs. 80 billion as per survey of the PT-1 forms of the Excise and Taxation Department of the Government of Punjab.
  • Increased dependence on presumptive taxation has deprived the exchequer of Rs.150 billions of rupees in the pharmaceutical sector alone.
  • From 2003 to date, according to a conservative estimate, we have lost Rs. 50 to 70 billions worth of wealth tax that could have been imposed on unaccounted/untaxed wealth amassed by those already enjoying the privileges of a luxurious life.

 

Claim of the authorities that wealth tax was useless as it did not contribute much to the exchequer (see government-fed report in Business Recorder dated 3rd May 2008) speaks of the rigid target-oriented mindset that taxes are only meant to raise revenue. They forget that wealth tax may be an outdated levy in civilized countries of the world (after achieving the supreme goal of creating an egalitarian society) but was specifically introduced in the Sub-continent because of the tendency of third world nations to invest in unproductive areas as gold, real estate, bank balances or even cash tucked away in hidden vaults. It was meant to discourage hoarding of precious wealth and directing it towards constructive sectors and economic growth, for which innumerable incentives were provided in the Act. What to talk of ordinary people, many of our own political elite have been found to be owners of unfathomable wealth, safe in Swiss banks and foreign countries. If they claim to be true representatives of the people, they owe it to this country to bring back all this wealth and if not surrender to the nation, at least be prepared to pay tax, due on it.

 

Besides, it is a fallacy which we have proved many a times that tax authorities can investigate into unexplained investment, expenses etc. Section 111(4) of the Income Tax Ordinance has rendered them helpless as it allows the taxpayers to whiten illegally earned income through an extremely simple and easily available procedure by going to a money exchanger and getting fictitious foreign remittance in his account after paying a nominal premium of 1 to 2 percent of the entire proceeds!. It is irrelevant to delve into such details at this juncture but suffice to say that section 111 is no remedy vis-à-vis taxing enormous wealth generated from untaxed and/or ill-gotten income/wealth.

 

The nation desperately owes explanation from all those in power:

 

  • Why the privileged are continuously being favoured and poised against their own poorer brethren?
  • Why is it that ordinary taxpayers having income of more than Rs. 500,000 are required to submit annual wealth statements whereas rich and mighty politicians, who have exempt agricultural incomes have not yet made public their declarations of assts?
  • Why do they hesitate from paying wealth tax but charge Rs.25 per litre tax on petroleum products knowing very well that it is massively consumed?
  • Why not restore earlier subsidy on petroleum products and make good the loss by levy of wealth tax?
  • Why not curtail unnecessary and extravagant expenses on the establishment starting from the President house, to fill up the void?
  • Why not reduce the number of ministers/advisers instead of following policy of appeasement and doling out public offices as if this nation was not burdened enough by worthless and incompetent bureaucrats?

 

Despite the bleak scenario, there is always a ray of hope that wisdom will prevail and someone whose heart is fraught with patriotism in the true sense of this word will rid this nation of the neo-colonial subjugation to those who are constantly dictating their terms to a leadership that is oblivious to the people’s woes and misery.

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The writers (ikram@huzaimaikram.com), tax advisers, legal historians and authors, are visiting Professors of Lahore University of Management Sciences (LUMS).

 

 

Federation and distribution of taxes

May 13, 2008

Huzaima Bukhari & Dr. Ikramul Haq

 

The governments in Pakistan, military and civilian alike, have failed to end injustice in all spheres of life and areas, but more tragically in distribution of taxes between the federation and the federating units. Assignment of taxes is a vital constitutional and political issue that has been blatantly ignored, resulting in there being no judicious distribution of taxes between the centre and the provinces. The imbalances and unjust monopoly of taxes by Islamabad is a perpetual source of disharmony between the Centre and the provinces. Mr. Yousaf Raza Gilani, unanimously-elected Prime Minister, in his maiden speech after winning the “historic” vote of confidence, made a pledge that Concurrent List in the Constitution will be abolished within one year. One wonders why it could not be dispensed with immediately when there has been consensus in both the houses that it denies fair and equitable distribution of taxing powers between the federation and the federating units.

 

It is an undeniable fact that Islamabad has always usurped the right of the provinces by levying sales tax and other duties at federal level on goods and services within their (provincial) territorial jurisdiction. In all major federations, e.g. USA, Canada and India, the federating units have the exclusive right to levy indirect taxes on goods and services generated within their geographical boundaries. In Pakistan, the federal government has vehemently denied this right to all the four provinces. Adding insult to injury the federal government is collecting huge amount of taxes through provincial government departments treating them as withholding tax agents without paying any service charges as envisaged in Article 149 of the Constitution. On the contrary, it charges 2% fee to provinces while collecting sales tax on services on their behalf! This dichotomy has never been contested by any provincial government.

 

Federal highhandedness in tax matters (by using both federal and concurrent lists) has destroyed the financial and economic rights of provinces. The provinces should have the exclusive right to levy taxes on goods and services within their respective physical boundaries, but the Federal Government blatantly encroaches upon their undisputed right by levying tax on goods and services under the garb of presumptive taxes in Income Tax. Such taxes cannot be termed as taxes on income (which the federal government is empowered to levy under item 47 of the Federal List) but tax on goods and services. It is a great tragedy that this argument was not presented in the Supreme Court when the constitutionality of such provisions was challenged in 1991 and the debate merely revolved around academic discussions over the concept of income. If the Federal Government can treat tax on goods and services as tax on income, as held by the apex court per incuriam (a mistaken judgement) in Elahi Cotton case PLD 1997 SC 582, then what will be the sanctity of division of fiscal powers provided in the Constitution of Pakistan between the Federation and the provinces.

 

Our tragedy is that on the one hand we have too many taxes in the country (federal, provincial and local, although the last two only generate negligible national revenue) while on the other, the benefits of revenue collection are not reaching the poor masses of the less privileged provinces. The few rich are the real beneficiaries of every luxury that is available. Fiscal gap is increasing every year despite five-year Tax Administration Reform Programme (TARP) initiated in 2002 with borrowed funds of US$ 100 million.

 

The prime reason for failure to stall ever-increasing fiscal deficit is that provinces have not been empowered to generate their own resources. They have been denied fiscal autonomy of levying taxes on goods and services. Since 1947 our rulers at the Centre have been treating the provinces in the same way as the British imperialists.

 

In fiscal year 2006-2007, total federal tax revenue by Federal Board of Revenue (FBR) was Rs. 843 billion. The Federal government showed total receipts (both tax and non-tax) at Rs. 1087 billion, out of which the provinces received as little as Rs. 437 billion. Interestingly, the federal expenditure under two heads alone i.e. defence and debt-serving was Rs. 515 billion. The over-all deficit suffered by the Federal government was Rs. 373 billion.

  

The Centre might have given away some of the federal taxes to the provinces, most likely sales tax as is the case in India, if the federal taxes collection had increased substantially, but tragically, despite all kinds of oppression, highhandedness, negative tactics, withholding of refunds and what not the FBR took four years —1998-99 to 2001-02— to cross from Rs. 307 billion to Rs. 401 billion — an average increase of Rs. 24 billion a year. From 2002-03 to 2004-05 FBR managed to increase revenue from 460 billion to 590 billion— a poor performance as average annual increase did not even cover inflationary impact.  In 2005-06, the collection was Rs. 710 billion, and the last year it was Rs. 843 billion. This year’s target of Rs 1025 billion already stands reduced to Rs. 950 billion, whereas our real potential is not less than Rs. 1600 to 1800 billon. FBR’s track record shows little possibility of achieving Rs. 2200 to 2700 billion mark in next five years to give a fiscal space both to the Centre and the provinces to come out of the present mess extending some relief to the poor and trade and industry for growth. Thus in the near future, if our federation-provinces taxing impediments continue, the country will remain in debt enslavement and more and more people will be pushed below the poverty line. If we want to come out of this crisis, there is an urgent need in Pakistan to reconsider equitable distribution of fiscal and taxing powers between federation and the provinces. Provincial autonomy is meaningless without fiscal rights and redistribution of income and wealth amongst all the federating units. It is hoped that some concrete measures will be announced in the forthcoming first budget of the new government, for achievement of these goals.

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The writers are tax advider ikram@huzaimaikram.com

Astringent legacy of May 12

May 13, 2008

Huzaima Bukhari & Dr. Ikramul Haq

May 12 of 2007 and 2008 will be remembered in Pakistani history as a tragic and lamentable day—a dictator with the connivance and support of certain forces managed to frustrate the aspiration of people to see their homeland a place worth living that holds a better future for the coming generations.  The expiry of second deadline of May 12, 2008, after a lapse of mutually-agreed and self-imposed condition of 30 days for the restitution of judges announced in Bhurban on March 9, 2008 and decision of PML(N) to quit from the coalition government may have made the dictator and his cronies happy, but disappointed the entire nation. People are in bewilderment over the indecisiveness of our political leadership (sic) and non-functioning of Parliament above the party lines on this very vital constitutional issue. The failure of long-drawn parleys between Asif Ali Zardari and Mian Nawaz Sharif and their teams in London on May 11, 2008 came as a rude shock for every citizen of Pakistan.

 

It needs to be remembered that Law Minister, Farooq H. Naek, immediately after the announcement of new deadline by Mian Nawaz Sharif in Lahore said “it may not be ‘final’”, yet the PML (N) leadership failed to read between the line messages. PML(N) should have gone for filing a Bill at its own in the Parliament for ‘Restitution of Judges Act 2008’ instead of relying on a “leadership” (sic) that ditched the  most-trusted man of Shaheed Benazir Bhutto, Makhdoom Fahim, on the dictates of Musharraf and handed over all the powers to a never-party-man, Rehman Malik. This was an ugly joke with the die hard party workers and those who made great sacrifices for the Bhuttos. PPPP of the Shaheed Zulfikar Ali Bhutto is different from the PPPP of Asif Zardari. It is thus not surprising that Zardari, Rehman Malik, Farooq Naek et al managed to hoodwink the top leaders of PML(N) by referring the matter to a five-member committee to ponder, deliberate and present a draft, which proved to be an exercise in futility. The delaying tactics employed by Zardari on the issue of restitution of illegally removed judges are deplorable and motivated to merely serve the self-interest of certain quarters. 


Undoubtedly, the political leadership of PPP has once again shown lack of commitment. Mr. Zardari may have many pretexts, valid or invalid, for not following the deadline(s) or deviating from the original declaration, promising the restoration of status quo ante of November 2, 2007 without any conditionality. But the nation will never forgive him for using delaying tactics and openly vowing to retain the judges who supported the dictator on November 3, 2007 and thereafter. 

 

The undoing of patently unconstitutional and shamelessly executed acts of November 3, 2007 and implementation of Murree Declaration of March 9, 2008 have great significance in determining whether 8-year-long dictatorial rule in Pakistan will end or not even after anti-Musharraf verdict of the masses on February 18, 2008. The issue of restitution of judges (reinstatement is a wrong notion as they are still judges) is in fact a question of constitutional survival of Pakistan. In parleys between leaders of coalition partners in London, Dubai, Karachi and elsewhere, the issue reportedly was to devise a “correct legal methodology” to counter the strategy of Musharraf camp to block the move through a stay order. It is not understandable why the political forces are not uniting to impeach the unconstitutionally-imposed President, rather than waiting for his purported further illegal actions.


Illegally removed judges, in fact, never ceased as judges. The question is not that of their reinstatement but ordering of status quo ante existing on November 2, 2007. The Parliament unquestionably and unambiguously under the Constitution has full authority to do so. Unfortunately, the Musharraf camp, with the connivance of certain elements, has managed to create confusion in this regard. Musharraf’s propaganda machine using certain quarters, including some members of legal fraternity, started a debate that in the presence of judgements, namely, Tika Iqbal Muhammad Khan v General Pervez Musharraf and 2 others (PLD 2008 Supreme Court 6) and Tika Iqbal Muhammad Khan v General Pervez Musharraf and others (PLD 2008 Supreme Court 178), it is not possible to restore the judges through passing of a resolution in the Parliament and/or an executive order. These quarters conveniently ignore the fact that these judgements are coram non judice, issued after seven-member bench declared action of November 3, 2007 illegal. These judgements also have no binding force as reached per incuriam in view of ratio decided by the apex court in PLD 1997 SC 351. 

 

On the one hand, it has been recorded that “Prime Minister apprised the President of the situation through the letter of 3rd November 2007″ for imposition of emergency, and on the other, order passed by the Chief of Army Staff is approved, which is self-contradictory. It has not been elaborated under what authority of law Chief of Army Staff imposed emergency on the advice of Prime Minister. It is held that judges “who have not been given, and who have not made, oath under the Oath of Office (Judges) Order, 2007, have ceased to hold their offices on the 3rd day of November, 2007.” Since the Oath of Office (Judges) Order, 2007 is void ab initio, any proceedings taken in pursuance of the same are nullity in the eye of law. No judge can be removed except through the method provided in Article 209 of the Constitution. 

 

Since the judgements of apex court, issued after seven-member bench declaring action of November 3, 2007, are untenable, the restitution of judges, deposed through a law violative of express provisions of the Constitution, poses no problem. The newly-elected parliament by refusing to validate Article 270AAA and passing an Act nullifying the judgement of Supreme Court can restitute the pre-November 3, 2007 judiciary.  The matter is of simple legal nature and should be solved through a legal procedure rather than entering into political polemics and undue controversies. This will not be the first time that the Parliament will nullify a judgement of apex court; it was done in the past by passing a law through simple majority. Numerous precedents are available to this effect, which Mr. Farooq H Naek certainly knows. The act of Parliament will restore the rule of law in its real sense in the country and all the deposed judges will be restituted without any interference on the part of executive. If done through an executive order, it will set as bad an example as one set by Musharraf on November 3, 2007. In future, any Chief of Army Staff or government can resort to such an illegality. 

 

There, however, is no need for any constitutional amendment, for which two-third majority is required, as propounded by Abdul Hafeez Pirzada, Rashid Quershi, Malik Qayyum, Waseem Sajjad, and Ahmad Raza Kasuri et al. The Supreme Court after restitution of pre-November 3, 2007 judiciary will certainly take cognizance of the matter suo moto or on the initiation of aggrieved party [which is public at large] to correct the mistakes committed by their learned colleagues. It will restore the rule of law in its real sense in the country.  All the judges [illegally removed] are still judges as action of November 3, 2007 was declared void ab initio by seven-member bench. The illegally removed judges must assume their offices immediately as soon as an Act is passed by the parliament nullifying the above-referred judgements. In fact, in terms of Article 190 of Constitution, all executive and judicial authorities throughout Pakistan are legally required to act in the aid of Supreme Court. The new government is duty-bound to implement the order of seven-member bench of apex court of November 3, 2007

 

However, the issue of ousting of judges, their house arrests, denying them right of free speech and movement and now hindrances in their restitution cannot be examined in isolation. This confirms that as a nation, even after 61 years of existence we have miserably failed to abide by rule of law. At the heart of the concept of democracy is the assurance for the citizens that their affairs are going to be managed by a ‘Responsible Government’ and rule of law will be ensured. If we analyse the Pakistani scenario in the light of the above basic principle, there will be utter disappointment and frustration. The conduct of each government after the death of Father of the Nation was to waste or plunder public money, force the people into international debt enslavement and mercilessly flout all rules and laws. Therefore, if we have failed to establish independent judiciary, true democracy or a responsible Government, it is not surprising. Dispensation of justice is the main pillar of democracy, which is not possible without ensuring independence of judiciary. 

 

Since the bizarre episode of March 9, 2007, there lurks a continuous struggle between the different organs of State to display their muscles and supremacy. Control of State with the barrel of gun cannot be matched by judicial activism.  People’s power alone can counter any unconstitutional or extra-constitutional move. Political leadership with the backing of masses can avert action like that taken on November 3, 2007. Courts are meant to interpret law, whereas enforcing the will of people and countering any despotic rule is always a political question that cannot be solved by the courts. Since our leadership has failed to establish rule of law, the entire society is now in the line of fire. All kinds of conflicts are surfacing for want of rule of law and accountability of those who transgress their limits.

 

The main cause of our present day pathetic socio-political and economic situation is existence of inefficient, corrupt, repressive and criminal institutions, which do not give a damn for the welfare of the common people. Successive governments’ policies of self-aggrandizement have reduced Pakistan to a state-in-perpetual-conflict. The worsening economic situation with poor law and order testify to the fact that progress and tranquility cannot be achieved by merely toeing the policies of aggressors and oppressors. Time has come for political parties to overcome their infightings and on national issue of constitutional revival, join hands against the anti-democratic forces. If Zardari wants to be remembered as a leader of masses, like Shaheed Benazir Bhutto, he should immediately sever all ties with the Musharraf Camp and restitute the illegally deposed judges. He should not forget that denying the establishment of a true democratic structure and independence of judiciary tantamount strengthening the hands of enemies of State. If he is advocate of “changing the system”, he should reconsider hidden (sic!) ties with the “power” if he wants to be remembered as a true representative of the people; or otherwise he will be adjudged by history in the same category as those who joined the King’s party under the banner of PML(Q).

 

Now that Ms. Nilofer Bakhtiar, member of Forward Block of PLM(Q), has filed resolution for restitution of judges in her personal capacity, the Parliament, irrespective of allegiance of individual members for their respective parties, must rise to the occasion—which is their historic challenge – to take the following steps for the restitution of illegally deposed judges, which also takes care of Mr. Zardari’s concern (sic) for “real change” and “truly independent judiciary”:

 

In its resolution, newly-elected parliament denounces all the acts taken on November 3, 2007 and resolves that for a true democratic and constitutional rule, a strong and independent judiciary is a sine qua non. Thereafter, the following bills should be tabled and passed:

 

¤ Bill for ‘High Treason Act 1973 (Amendment Act 2008): This Act amending High Treason Act, 1973 should provide that in case of violation of Article 6 of Constitution, it will be incumbent upon the apex court to take immediate cognizance and direct the Attorney General of Pakistan to initiate trial of offender. Thus in future, the apex court instead of validating any violation of Article 6 will be legally obliged to punish the offender(s). It will send clear message to imposer of emergency on November 3, 2007 to step down voluntarily or face trial for his admitted extra-constitutional acts.

 

¤ Bill for ‘Oath of Judges, Act, 2008′ (invalidating Oath of Office (Judges) Order 2007): By Passing this Act, the National Assembly will pave the way for reinstatement of November 2, 2007 Judiciary and nullify the judgements of apex court, namely, Tika Iqbal Muhammad Khan v General Pervez Musharraf and others (PLD 2008 Supreme Court 178) and Tika Iqbal Muhammad Khan v General Pervez Musharraf and 2 others (PLD 2008 Supreme Court 6). With the passing of this Act, in future no judge will be removed through any executive order or through any law related to oath of judges.

 

¤ Bill for National Reconciliation Act 2008 (NRA): In National Reconciliation Ordinance 2007, Musharraf intentionally excluded cases registered after 12 October 1999 for ulterior motives to exclude Nawaz Sharif and Shahbaz Sharif. In order to create a genuine atmosphere of national reconciliation and put an end to political victimization, this new Act should be passed immediately removing all the time-specific and person-specific provisions in NRO, 2007, which are in direct conflict with the Constitution, and extending its scope to all the persons affected.

 

The above measures will pave the way for a new beginning in this country ensuring the rule of law, constitutionalism, democracy and justice through an independent judiciary.

_______________________________________________________

The writers (ikram@huzaimaikram.com), tax advisers, legal historians and authors, are visiting Professors of Lahore University of Management Sciences (LUMS).

 

War & “development” in tribal areas

May 4, 2008

Huzaima Bukhari & Dr. Ikramul Haq

The situation in Federally Administrated Areas (FATA) and Provincially Administrated Areas (PATA) of Pakistan remains very explosive due to perpetual violence, arm conflicts and military operations. Historically, these areas have been harbinger of drug trade, but after 9/11 have emerged as the focal point of ‘war against terrorism’ (sic). Social and economic development of these areas has never given a serious thought by successive governments in Pakistan[1]. In the wake of 9/11, the Musharraf’s government on the insistence of USA and donor agencies started earmarking more resources for the social uplift of the tribal area[2], but no tangible results are still in offing for various reasons, the most important one is lack of acceptance and/or representation of local people in development planning and its implementation[3].

The newly-elected Prime Minister of Pakistan, Yousaf Raza Gilani, in an article published in Washington Post the other day, vowed to continue war against terrorism, but “in our own way”. “Our strategy against global terrorism, he wrote, “will be multifaceted”. Mr. Gilani resolved that “Pakistan will not negotiate with terrorists, but it will not refrain from talking to insurgent tribesmen whose withdrawal of support could help drain the swamp in which terrorists fester and grow. Yet, no talks will be held with anyone refusing to lay down arms”. He further elaborated: “Our policy aims to marginalise terrorists in the Federally Administered Tribal Areas and our North-West Frontier Province, where the rule of law had been abandoned and territory all but ceded to Al-Qaeda and the Taliban. Negotiations with the various tribes are being pursued with the help of the secular Pakhtoon nationalist Awami National Party, which has intimate knowledge of tribes and clans in the area and which, along with my Pakistan People’s Party, received the bulk of the votes of ethnic Pakhtoons in the Feb. 18 parliamentary elections”.

Pakistani Prime Minister argued that “erroneous comparisons” had been made between the new government policy and the failed deals reached with tribal militants along the Pakistan-Afghanistan border in 2004 and 2006. He elaborated that those agreements were signed after militant groups bruised Pakistan’s security forces in battle. “Now we are negotiating from a position of strength. Militants have been asked to surrender their weapons and unequivocally give up violence. We will not cut off our ability to use force or lower the vigilance we maintain to guard against violations of the peace agreements”, he added. “We intend to restore order and to give the people an option other than collaborating with murderers whose sole goal is chaos and anarchy. We will welcome our tribes back into society while respecting their conservative interpretations of Islam, as long as they give up violence and refuse to acquiesce to the intimidation of terrorists”, Mr. Gilani added.

Mr. Gilani, however, offered no explanation for the following bizarre events took place immediately after or little before his taking of oath of Prime Minister:

  • The Taliban gained the upper hand in the fight against the Pakistani military in the settled districts of Swat and Shangla in the Northwest Frontier Province. While the Pakistan military claims to have killed up to 150 Taliban. The government sent a telling message to the Taliban by releasing Sufi Mohammed, the leader of a virulent segment of the Pakistani Taliban. Sufi Mohammed is leading figure of the most dangerous Taliban leaders in the Northwest Frontier Province as head of the outlawed Tehrik-e-Nifaz-e-Shariat-e-Mohammadi (TNSM – the Movement for the Implementation of Mohammad’s Sharia Law). He is said to have “close links with the administration of the Lal Masjid,” according to Sharif Virk, the chief of police for the Northwest Frontier Province as well as senior al Qaeda leaders.
  • The TNSM is known as the “Pakistani Taliban” and is the group behind the ideological inspiration for the Afghan Taliban. The TNSM sent over 10,000 fighters into Afghanistan to fight US forces during Operation Enduring Freedom in October 2001. Sufi was jailed by the Paksitani government after the TNSM was banned.
  • Time Magazine reported Sufi was released “in hopes that he can help calm the situation” in Swat and Shangla, the neighboring district the Taliban overran in the lase week of April, 2008. Sufi’s release was endorsed by General Ahmed Shuja Pasha, the Director General of military operations in the region. “Shuja calls it part of the ‘political effort’ needed to accompany the military campaign,” Time reported. “Brute use of force alone would only take us backwards,” said Shuja.
  • Sirajuddin, the Taliban spokesman for Maulana Fazlullah, the Swat leader of the TNSM and Sufi’s son-in-law, stressed the importance of Sufi to the Taliban. “He is our leader and very dear to all of us, but our struggle for the implementation of a true Islamic system will not be affected,” said Sirajuddin. “Maulana Sufi is demanding the same. It is good that the government has released him; now it should start work on the implementation of Sharia.”
  • The release of Sufi is a clear sign the Pakistani government and the military are prepared to cut a deal with the Taliban in Swat and Shangla. The formation of a “peace jirga” is another. On November 18, Dawn reported local tribal leaders and members of the political parties have formed a peace jirga to end the fighting in Swat.
  • A jirga of elders and political leaders requested both the sides to cease fire.It urged the government to start talks with the militants. The participants said the government should implement the Shariat Act and Nizam-i-Adal regulations. The jirga convened by Syed Akber Shah Lala, cousin of provincial caretaker minister Mohammad Ali Shah Lala, was attended by former MNAs [Ministers of the National Assembly] and leaders of political parties.”
  • The Pakistani military continues to tout high body counts in Swat and Shangla as evidence it is succeeding in the districts. Major General Waheed Arshad claimed over 150 Taliban have been killed since fighting began in Swat. “Our offensive against militants has been continuing said Arshad.
  • The Taliban disputes the casualties cited by the Pakistani military. In an interview with Time, Sirajuddin said the numbers are “totally rubbish. Only ten of our jihadis have been killed.” In the past, the Pakistani military has inflated Taliban casualties while understating its own.
  • The military said it had mobilized 15,000 troops for a major offensive in Swat. But these troops were yet to be used in Swat, where air and artillery are primarily being used. “In Shangla we are using ground troops, and (elsewhere) in Swat we are using artillery and helicopter gunships,” said Arshad.
  • Baitullah Mehsud pulled out of peace talks after tribal leaders said the Army would not withdraw from South Waziristan. The government may release Abdullah Aziz, the former leader of Islamabad’s radical Red Mosque. The Taliban executed a “criminal” in Mohmand agency, where 12 Pakistanis were killed during battles between the Taliban and a tribe on April 27, 2008.
  • Musharraf said foreigners, especially Uzbeks and Afghans with links to al Qaeda are hiding in Pakistan’s tribal areas. The US said it would pursue Osama bin Laden in Pakistan if it has evidence of his location. The Pakistani Army has signed a peace deal with Baitullah Mehsud in South Waziristan.
  • The Movement for the Taliban in Pakistan, Baitullah Mehsud’s group, ordered the Mardan car bombing “in revenge.” Former Guantanamo Bay inmate Israrul Haq was rearrested while traveling to Mardan. Banned terror groups such as Jaish-e-Mohammad, Harkatul Mujahideen, and Hizbul Mujahideen are reforming in Karachi. Sufi Mohammed’s name has been removed from a murder case.
  • The TNSM earlier reportedly agreed to renounce violence in exchange for the release of Sufi Mohammed. Prime Minister Gilani said the government would not be blackmailed or release jailed terrorist as preconditions to talks. The Taliban warned it would resume fighting if the government does not stop the military operations in the tribal areas. A court ordered property own by Baitullah Mehsud be seized for his role in the assassination of Benazir Bhutto.

The bizarre situation in these areas gained momentum when the US announced that it would limit attacks in Pakistan and provide $7 billion for counterterrorism operations as part of its new strategy with the new government. The Pakistani Taliban agreed to implement sharia law in Mohmand agency. The Movement of the Taliban in Pakistan said it would stop fighting the government if negotiations are successful. The Taliban also held a two-day conference in Mohmand Agency. Earlier, the NATO Secretary General Jaap de Hoop Scheffer said Pakistan is “part of the solution” to the problems in Afghanistan. The Ahmedzai Wazir tribes in South Waziristan said the only acceptable replacement for the Frontier Crimes Regulation laws is shariah. The Taliban insisted the Pakistani government give up support for the US as conditions for peace talks. The Taliban also said attacks in Afghanistan would continue despite any deal made with the government. The Awami National Party made formal contacts with the Taliban, who praised the new government’s plan to repeal the Frontier Crimes Regulation and conduct negotiations.

The above developments convey mix signals and the chances of a lasting peace in these areas still not in sight. The new governments in Islamabad and Peshawar are sincere to achieve truce with Pakistani Taliban leaders, but situation is as complex as it was a year back when on on 7 March 2007, during his farewell visit to historic city of Peshawar, the outgoing US Ambassador to Pakistan, Mr. Ryan C. Crocker, stressed “long-term commitment to security and development” in the North West Frontier Province (NWFP) and the FATA[4]. He failed to mention PATA which are equally important and sensitive. Mr. Crocker emphasized that the United States should forge “multi-faceted and enduring relations with Pakistan” and reassured, “we are strongly committed to helping the people of Pakistan in our mutual fight against terrorism”.

The present situation in tribal areas of Afghanistan and Pakistan is direct result of initiation of so-called “jihad” (holy war) by USA and its allies to dismember the erstwhile Marxist USSR, after the coming of Red Army in Afghanistan. The USSR at that time was perceived by the West as its worst enemy endangering their international political and economic interests. The tribal people were used as mercenaries in this war against Marxism and after achieving the goal were left alone to fight each other. The United State’s role in converting these areas into hub of drug trade and terrorism is well-documented and cannot be controverted any more[5].

Historically, arms and drugs played a pivotal role in US foreign policy to control the groups, regimes and promote relations with military dictators. It is, therefore, not surprising if FATA finds strategic place in achieving what the US calls victory in the war against terrorism (sic)[6].  As done through out its history, the USA is trying hard to control tribal insurgents in FATA and other areas by helping Pakistani regime of General Musharraf[7].

It is strange to note that USA even in the aftermath of results of general elections of February 18, 2008 is supporting Pervez Musharraf despite the well-established evidence that he has been promoting religious obscurantism and jihadists (so-called holy warriors but in reality war mercenaries). The episode of Lal Masjid in Islamabad testifies to this unholy alliance and must have been an eye-opener as everyone knows who has been sponsoring the so-called, self-styled custodian of faith and what role the intelligence agencies were playing to use such subversive elements. The issue was highlighted out of proportions by the Musharraf to convince the West that if support was not lent to him, the religious extremists led by Mullahs could capture the nuclear State that would have disastrous repercussions for the world! This is sheer blackmailing and nothing else. It shows the real design of military-mullah alliance in Pakistan. The rise of clergy in Pakistan was not possible without the support of army that took place during the Ziaul Haq regime under the direct knowledge of USA and its allies. Its perpetuation is now the need of the army as both can guarantee each other’s existence and use of muscle power.

One wonders if US policy makers are so naïve not to decipher the real motive behind the government policies, which even a common Pakistani can elucidate. The ordinary Pakistanis do not approve of the nefarious policies of Musharraf and are fully aware of the nexus between law enforcement agencies and certain religious groups e.g. people controlling Lal Masjid or those waging sectarian and tribal battles in FATA and PATA[8].

It is lamentable that our so-called religious leaders incite the people of Pakistan in general and tribes living in FATA in particular against USA, but when opportunity to enjoy “foreign money” for relief or development comes, they claim their entitlement as a matter of right[9].  This is hypocrisy in its worst form. There is an urgent need to develop FATA, PATA and all the underdeveloped areas of NWFP[10]. Factors like poverty, lack of education and dominance of Mullah are the root cause of “terrorism”. The unemployed and disillusioned are easy victims of recruitment onslaught by certain terrorist groups and Taliban.

These merchants of death use these innocent people for drug trafficking[11] and fighting in the name of jihad. One wonders how is it justifiable to use drug money for holy war. They are no waging any ‘jihad’ as claimed by them. In fact they are exploiting helpless, poor tribal people[12] for nefarious motives i.e. minting money from drug and arms trade. The ongoing war on terrorism is not between Islam and the West but between the forces of obscurantism and the oppressors. Policymakers in USA and the West are serving the interests of war industry. The war industry cannot survive without selling its products and hot spots are required by Bush administer USA to get huge funds from Congress. The opponents groups also need armament which they buy from drug money. In this way certain mafia inside USA and elsewhere make huge profits for trading arms for drugs.

The issues of exploitation of governments by the war industry and drug trade need to be tackled by international community on urgent basis. Conflicts like Palestine, Iraq, Kashmir, Chechnya are to be resolved along with development of areas like FATA, PATA and NWFP, if we want to win ‘war against terrorism’. Mr. Crocker after serving in Pakistan is now performing duties as Ambassador in crisis-ridden Iraq. Having first hand knowledge of realities in tribal areas of Afghanistan and Pakistan, he can convince Dick and Bush to leave Iraq as quickly as possible, otherwise entire region will destabilize having negative impacts for entire world in general and the Muslim world in particular. In such an eventuality the sensitive areas like FATA, PATA and NWFP will turn out to be more and more attractive for US enemies.

________________________________________________________

Huzaima Bukhari & Dr. Ikramul Haq (www.huzaimaikram.com) are authors of many articles and books on foreign policy, money laundering operations, tax frauds, narco-terrorism and socio economic problems concerning our present day international society.

 



[1] FATA covers a total area of 27,220 sq km with a population of 3.1 million living in seven agencies and six Frontier Regions. Since 2001 after becoming ally of USA, Musharraf has been claiming that efforts are underway to bring the tribal area at par with rest of the country. However, so far no significant achievement has been witnessed towards this end. The FATA literacy ratio is hardly 17 per cent (against the nation’s 45 per cent) which include 29.51 per cent for males and just three per cent for females.

 

[2] A nine-year uplift plan for the Federally Administered Tribal Area (FATA), estimated to cost $2.6 billion, was unveiled at a donors conference held on April 12, 2007 in Peshawar. Representatives of different agencies, UN bodies, humanitarian organisations and diplomats attended. According to Arbab Muhammad Arif, Secretary Security (FATA), the idea behind the programme is the creation of a peaceful and equitable society in the tribal belt in order to curb militancy.

 

[3] Lack of capacity of the implementing agencies is a major constraint in FATA’s development. At the Agency level, the government has set up planning and finance departments, but they do not function properly because of the absence of an effective financial management system. Lack of coordination between various departments and the donor agencies also cause duplication of work and leads to financial wastage and administrative failures. Similarly, the community participation approach needs to be introduced in FATA. In recent past, the government tried to undermine the role of Maliks in project selection and making the process more participative by involving the Agency Counsellors, majority of whom are selected by the Political Administration. At the policy formulation level, the Counsellors are authorised to select and recommend the execution of development plans, but in reality no heed is paid to their recommendations. The planners believe that without putting in place an institutionalised mechanism for project selection, designing and implementation, sustainable development in FATA would not be possible.

 

[4] These are controlled by the provincial government of NWFP which is led by a coalition of religious parties known as Muthida Majlis Amal (MMA). The role of MMA as ally of General Musharraf in consolidating his rule is well-known. Though MMA keep on opposing (verbally) the pro-USA policies of General Musharraf, but in Balochistan, which is the largest province of Pakistan in terms of area, it made a coalition government with ruling King’s party, PML (Q). The independent analysts believe that Mullah-military alliance is still very strong and MMA was nothing but a tool in the hands of army to exert pressure on the West to ensure perpetual support for an undemocratic rule.

 

[5] See Pakistan: Drug-trade to Debt-trap (http://66.201.122.226/weekly/books/archive/031109/books9.htm )

 

[6] In his farewell interview with the editorial team of US Embassy’s Monthly Khabr-o-Nazar (March 2007), Mr. Crocker said: “I am leaving with a sense of sadness that I am not going to be able to remain longer here, but with a very good sense about where we are going in this relationship. I have enormous confidence in the future of this country, the capacities and the intentions of its people. Pakistan in the years to come is going to be a regional leader, and we look forward to being a partner, as the full resources and capacities of this country continue to be developed, and a partner as a world leader with again an absolutely vital regional state and a good friend and ally.”

 

[7] The US Ambassador, Mr. Crocker, in his farewell interview revealed a number of steps were taken up by the US government in the wake of declaration of ‘war on terrorism’ to make Pakistan strong, which included: (1) military assistance that marked the arrival of Cobra helicopters to support “Pakistan’s efforts in War on Terror”, (2) Supplies to the Pakistan Navy, (3) F-16 sale , two F-16s have already arrived in Pakistan and (4) three billion dollars aid over five years, split evenly between economic and security.

 

[8] US Ambassador admitted the fact in his interview that ordinary Pakistanis are very enlightened and hospitable towards foreigners contrary to their negative projection in Western media. He said: “I found Pakistan and Pakistanis to be enormously welcoming and hospitable people. I find it noteworthy that during my two-and-a-half years here that, while clearly there are many Pakistanis who have been unhappy over various aspects of U.S. policy in the region, my American staff consistently report the same thing that I have seen for myself. Individualized anti-Americanism virtually does not exist here. When Americans, either from this embassy or the community, are out in the streets, the markets around the city, in the country, they encounter nothing but hospitality and generosity, and I think it is quite extraordinary. It is the same thing I remember from my first trip to Pakistan, which was as a university student in 1970 – hitch-hiking from Peshawar to Wahgah. That Pakistan part of the trip stood out to me just because people were so very nice, and the people I was dealing with then did not have very much of their own but they were always wanting to share it. So, again, what struck me most during this period (in Pakistan) was the hospitality, courtesy and generosity.”

 

[9] It is a pity, but irrefutable fact, that so-called Muslim Ummah, especially the oil-rich countries, failed to commit or fulfill promised donation for the earthquake relief. On the contrary, the government of USA (the policies of which are strongly criticized by Muslim people) showed great generosity in helping the affectees of the disastrous earthquake in Kashmir.

 

[10] It is not merely lost economic revenue or local law and order that concerns Pakistani government officials. Many experts and officials believe that the FATA is being used as a staging area for militant activity, some of it directed against coalition forces in neighboring Afghanistan and some against the Pakistani government. This worry has grown more acute in the wake of several assassination attempts against Pervez Musharraf. In light of the difficult to verify but nevertheless oft-stated presumption that Osama bin Laden and other senior members of Al Qaeda are hiding in the mountainous tribal areas of Pakistan, perhaps with the knowledge of local leaders, the government’s efforts to gain control over these areas have gained urgency.  Security was considered to be one of the reasons behind the Pakistan government’s decision to close all of the remaining refugee camps in the FATA.

[11] One of the reasons the drug and smugglers’ markets have been difficult for Islamabad to deal with is that they exist in the so-called Federally Administered Tribal Areas(FATA), where the central government’s writ is weak. Although each of the FATA’s seven agencies is ostensibly governed by a “political agent” appointed by the government in Islamabad, in practice the tribal areas are ruled by traditional Pashtun leaders, exercising a blend of personal decree, Islamic law (sharia), and traditional Pashtun legal practices known collectively as pushtunwali. Despite Islamic proscriptions against drugs and alcohol, the smugglers’ markets have been an important source of revenue for some FATA leaders, who continue to permit this operation.

 

[12] Indicators on health sector in FATA depicts a dismal picture, where for 2179 persons only one bed and for 6762 persons only one doctor is available. However, the security situation does not offer ideal environment for unhindered development. In most of the tribal agencies, skirmishes between militants and security forces and inter-tribal feuds are a routine affair. But the conflict may not go away easily if the tribal areas remain under-developed.

Restitution of judges: A case for constitutional survival

May 4, 2008

Huzaima Bukhari & Dr. Ikramul Haq

 

After lapse of mutually-agreed and self-imposed condition of 30 days on April 30, 2008 for the restitution of judges announced in Bhurban on March 9, 2008, Mian Nawaz Sharif declared yet another deadline for May 12, 2008, which Law Minister Farooq H. Naek says may not be “final”. This is an ugly joke with the entire nation. The matter has again been referred to a five-member committee to ponder, deliberate and present a draft. These tactics are deplorable and motivated to serve self-interest of certain quarters. The meeting of Law Minister with present Chief Justice in the wake of announcement by Nawaz Sharif in Lahore on May 2, 2008 speaks for itself.

 

Undoubtedly, the political leadership has once again shown the lack of commitment, especially on the part of majority party. Their leadership may have many pretexts, valid or invalid, for not following the deadline or deviating from the original declaration promising the restoration of status quo ante of November 2, 2007 without any conditionality. But the nation will never forgive them for their inactions, using delaying tactics and to retain the judges who supported the dictator on November 3, 2007 and others who joined his bandwagon thereafter. They are doing this for self-interest as Musharraf-picked judiciary will serve them better.

 

The long-drawn parleys between Nawaz Sharif and Asif Ali Zardari for implementation of Murree Declaration of March 9, 2008 on restitution of judges has serious undertones in determining whether 8-year-long dictatorial rule in Pakistan will end or not. The issue of restitution of judges (reinstatement is wrong notion as they are still judges) is in fact a question of great important vis-à-vis constitutional rule in Pakistan. In parleys between leaders of coalition partners in Karachi, Dubai and elsewhere, the issue reportedly was to devise a “correct legal methodology” to counter the strategy of Musharraf camp to block the move through a stay order. One wonder why the political forces are not uprooting the root-cause by impeaching the unconstitutionally-imposed President, rather than waiting for his purported further illegal actions.

 

Illegally removed judge, in fact, never ceased as judges. The question is not that of their reinstatement but ordering of status quo ante existing on November 2, 2007.  The Parliament unquestionably and unambiguously under the Constitution has full authority to do so. Unfortunately, the Musharraf camp, with the connivance of certain elements in judiciary and political parties, has managed to create confusion in this regard. The Musharraf’s propaganda machine using certain quarters, including some members of legal fraternity, started a debate that in the presence of judgements, namely, Tika Iqbal Muhammad Khan v General Pervez Musharraf and 2 others (PLD 2008 Supreme Court 6) and Tika Iqbal Muhammad Khan v General Pervez Musharraf and others (PLD 2008 Supreme Court 178), it is not possible to restore the judges through passing of a resolution in the Parliament and/or an executive order.

 

These quarters conveniently ignore the fact that these judgements are coram non judice, issued after seven-member bench declared action of November 3, 2007 illegal. These judgements also have no binding force as reached per incuriam in view of ratio decided by the apex court in PLD 1997 SC 351. On the one hand, it has been recorded that “Prime Minister apprised the President of the situation through the letter of 3rd November 2007” for imposition of emergency, and on the other order passed by the Chief of Army Staff is approved, which is self-contradictory. It has not been elaborated under what authority of law Chief of Army Staff imposed emergency on the advice of Prime Minister. It is held that judges “who have not been given, and who have not made, oath under the Oath of Office (Judges) Order, 2007, have ceased to hold their offices on the 3rd day of November, 2007.”  Since the Oath of Office (Judges) Order, 2007 is void ab initio, any proceedings taken in pursuance of the same are nullity in the eye of law. No judge can be removed except the method provided in Article 209 of the Constitution.

 

Since the judgements of apex court, issued after seven-member bench declaring action of November 3, 2007, are untenable, the restitution of judges, deposed through a law violative of express provisions of the Constitution, poses no problem. The newly-elected parliament by refusing to validate Article 270AAA and passing an Act nullifying the judgement of Supreme Court can restitute the pre-November 3, 2007 judiciary. The matter is of simple legal nature and should be solved through a legal procedure rather than entering into political polemics and undue controversies. This will not be the first time that the Parliament will nullify a judgement of apex court; it was done in the past by passing a law through simple majority. Numerous precedents are available to this effect, which Mr. Farooq H Naik certainly knows. The act of Parliament will restore the rule of law in its real sense in the country and all the deposed judges will be restituted without any interference on the part of executive. If done through an executive order, it will set as bad an example as by the Musharraf on November 3, 2007. In future, any Chief of Army Staff or government can resort to such an illegality.

There, however, is no need for any constitutional amendment, for which two-third majority is required, as propounded by Abdul Hafeez Pirzada, Rashid Quershi, Malik Qayyum, Waseem Sajjad, Khalid Ranjha, and Ahmad Raza Kasuri et al. The Supreme Court after restitution of pre-November 3, 2007 judiciary will certainly take cognizance of the matter suo moto or on the initiation of aggrieved party [which is public at large] to correct the mistakes committed by their learned colleagues. It will restore the rule of law in its real sense in the country. All the judges [illegally removed] are still judges as action of November 3, 2007 was declared void ab initio by seven-member bench. The illegally removed judges must assume their offices immediately an Act is passed by the parliament nullifying the above-referred judgements. In addition, in terms of Article 190 of Constitution, all executive and judicial authorities throughout Pakistan are legally required to act in the aid of Supreme Court. Thus, the new government is duty bound to implement the order of seven-member bench of apex court of November 3, 2007.

 

However, the issue of ousting of judges, their house arrests, denying them right of free speech and movement and now hindrances in their restitution cannot be examined in isolation. This confirms that as a nation even after 61 years of existence, we have miserably failed to abide by rule of law. At the heart of the concept of democracy is the assurance for the citizens that their affairs are going to be managed by a ‘Responsible Government’ and rule of law will be ensured. If we analyse the Pakistani scenario in the light of the above basic principle, there will be utter disappointment and frustration. The conduct of each government after the death of Father of the Nation was to waste or plunder public money, force the people into international debt enslavement and mercilessly flout all rules and laws. Therefore, if we have failed to establish independent judiciary, true democracy or a responsible Government, it is not surprising. Dispensation of justice is the main pillar of democracy, which is not possible without ensuring independence of judiciary.

 

The Parliament, irrespective of allegiance of individual members, must rise to the occasion—which is their historic challenge—to take the following steps for the restitution of illegally deposed judges, which also take care of Mr. Zardari’s concern (sic) for “real change” and “truly independent judiciary”:

 

In its resolution, newly-elected parliament denounces all the acts taken on November 3, 2007 and resolves that for a true democratic and constitutional rule, a strong and independent judiciary is a sine qua non. Thereafter, the following bills should be tabled and passed:

  •  
    • Bill for ‘High Treason Act 1973 (Amendment Act 2008).

This Act amending High Treason Act, 1973 should provide that that in case of violation of Article 6 of Constitution, it will be incumbent upon the apex court to take immediate cognizance and direct the Attorney General of Pakistan to initiate trial of offender. Thus in future, the apex court instead of validating any violation of Article 6 will be legally obliged to punish the offender(s). It will send clear message to imposer of emergency on November 3, 2007 to step down voluntarily or face trial for his admitted extra-constitutional acts.

  •  
    • Bill for ‘Oath of Judges, Act, 2008’ (invalidating Oath of Office (Judges) Order 2007).

By Passing this Act, the National Assembly will pave the way for reinstatement of November 2, 2007 Judiciary and nullify the judgements of apex court, namely, Tika Iqbal Muhammad Khan v General Pervez Musharraf and others (PLD 2008 Supreme Court 178) and Tika Iqbal Muhammad Khan v General Pervez Musharraf and 2 others (PLD 2008 Supreme Court 6). With the passing of this Act, in future no judge will be removed through any executive order or through any law related to oath of judges.

  •  
    • Bill for National Reconciliation Act 2008 (NRA)

In National Reconciliation Ordinance 2007, Musharraf intentionally excluded cases registered after 12 October 1999 for ulterior motives to exclude Nawaz Sharif and Shahbaz Sharif. In order to create a genuine atmosphere of national reconciliation and put an end to political victimization, this new Act should be passed immediately removing all the time-specific and person-specific provisions in NRO, 2007, which are in direct conflict with Constitution, and extending its scope to all the persons affected.

 

The above measures will pave the way for a new beginning in this country ensuring the rule of law, constitutionalism, democracy and justice through an independent judiciary.

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The writers (ikram@huzaimaikram.com), tax advisers, legal historians and authors, are visiting Professors of Lahore

From intolerance to lawlessness: Politics of hate and revenge

May 4, 2008

Huzaima Bukhari and Dr. Ikramul Haq

April 9, 2008 was another day of mayhem in Karachi: violent clashes, burring of offices with persons trapped inside, loss of life and property, all testifying that Pakistan is a state in perpetual crisis. For the last many years, we are witnessing all kinds of conflicts—economic, socio-political, centre-provinces disagreements, sectarian, tribal, ethnic and religious fights, suicidal attacks, thrashing of political opponents and what not. These are the wages of “learned helplessness” and tolerating one-man’s dictatorial rule for eight long years. Although Musharraf poses himself as saviour of nation, man with vision and promoter of enlightenment and moderation, but it is undeniable fact that he created a new class of cronies and sycophants that used brutal state power to gag every dissident voice—how lawyers, politicians, political workers, members of civil society, media men and even judges of superior courts were manhandled, detained and tortured is well-documented in our history now.

 

Violence breeds violence: chain reaction of suicidal attacks after ruthless operation of self-created drama at Lal Masjid and Jamiae Huffza; assassination attempts on key political figures in retaliation to backing indiscriminate bombing of tribal areas; bashing of Arbab Ghulam Rahim and Sher Afgan Niazi (two right-hand men of Musharraf) who even after manhandling of Chief Justice of Pakistan (he was dragged and pulled by hair) showed great jubilation. These incidents, whosoever is the victim, are highly condemnable. All the sections of society, however, should not pay just lip-service to non-violence and tolerance by just indulging in repeated condemnation and heartfelt sadness over these ugly incidents. All of us will have to strive hard together to end the politics of hate and vengeance. Blame game and mudslinging must end now. We need to find reasons behind this growing spate of violence and must uproot the root cause, rather than curing the symptoms—a fruitless effort.

 

The man behind the politics of intolerance and hate, symbol of discord rather than harmony as president of State, is responsible for present state of affairs. How one can forget the man, who after brutal killing of dozens of people on his order on May 12, 2007 in Karachi, in the night in Islamabad, with all the cronies around, had guts to raise hands and announce “….have you seen our power”. He is still showing that “power” by sticking to illegally and unlawfully occupied position, busy hatching conspiracies to prove that people of Pakistan and political leadership are incapable of managing affairs of State and democracy is not suitable for Pakistan. This is what he told the West during his last visit before the 2008 elections. He dubbed his own people “immature” and “ignorant” [they proved him wrong by giving clear mandate on February 18, 2008] and now he is trying his level best to prove that their elected leaders are “incapable” of running government, maintain law and order, what to talk of establishing democracy.     

 

The tragedy of Pakistan is non-resisted, unchecked and unfettered perpetuation of unholy alliance between the establishment (both civil and military) and political elite. This anti-people alliance deprives the people of their fundamental rights and political empowerment. It dispossesses them of great wealth of natural resources and equitable and just division of economic benefits. It is now well-established that unless this unholy alliance is destroyed, there is no hope of establishment of true democracy and rule of law in Pakistan, without these ugly incidents will keep on happening. The way Musharraf and his cronies maltreated the judges (even after new prime minister took charge of office, house of one judge ransacked) shows how far a US-backed dictator can go to humiliate his own people and make mockery of everything. If Musharraf survives even after the wake of people’s verdict of February 18, 2008, with the help of US and support of certain political elements [beneficiaries of NRO?], history will never forgive the Pakistani politicians and intelligentsia for not mobilising the common people to force him to step down like the masses did in Georgia. From the events of recent weeks, it is crystal clear that Musharraf is again skillfully pitting different sections of society against each others to regain his lost empire. He and his mentors (Bush et al) are supporting him and forcing the winners of 2008 elections to accept him.

 

The mentors of Musharraf must realise that their criminal culpability of supporting a dictator in the name of so-called ‘war on terrorism’ (sic) has started showing its worst side in Pakistan—from institutional crises to breakdown of civic society, from intolerance to lawlessness. Musharraf has been and is still using self-styled, self-motivated guardians of morality (sic) and political Jialas (enthusiasts) to take law in their hands—they are infiltrated and planted by hidden hands in the ranks and files of political parties and other organisations. The incidents of Lal Masjid and Jamiae Huffza and attacks on Arbab Rahim and Sher Afgan testify to this without any doubt. In these circumstances, the most important issue is how to prepare masses to come out of “learned helplessness” and “self-destructive apathy”.

 

“Learned helplessness”, as demonstrated by empirical data in 1965 by psychologist Martin Seligman, arises from apathy. Once a person knows he is helpless, he stops making any effort to change his circumstances and develops apathy as a way of life. Now people are taking law in their own hands as judges are not allowed to work. The apex court judges themselves are seeking justice! The masses of this country have become apathetic after continuously witnessing the hopeless conduct of their political leaders, who failed to do anything for them during their rules [twice the leading parties PPP and PML(N) got a chance to serve the people but they opted to make money and/or please the mighty generals]. Such apathy arising from “learned helplessness” is the reason why the masses were not ready to come on streets against Musharraf when he was destroying every institution and making the poor man’s economic life miserable. In contrast Zulfikar Ali Bhutto managed to bring masses on street when he started a movement against the military power. Sheikh Mujeebur Rehman attracted masses while countering military atrocities in the then East Pakistan. In those days, political apathy was non-existent as people had faith in their leaders and were ready to fight for their rights and just causes. Now they know that after winning elections, their leaders are more interested in settling ministerial positions and to find ways to be close to the power that matters in the land.

 

The present scenario will not change unless our political leadership starts regaining the support of masses in real sense (voting process is a different dimension) rather than just struggling for worthless ministerial and/or parliamentary positions. They must find ways to prepare the masses to overcome the syndrome of “learned helplessness”.  The existing control of Establishment over State apparatus can only be destroyed and countered through a mass power.

 

The colonial policy of divide and rule employed by Establishment is creating rift between political parties, encouraging battles within civil society and promoting extremism, through funding certain elements, to counter the masses so that instead of uniting for removal of Musharraf, they should rather beg for support of the mighty for protection of life and property. This is their right and obligation of the State, but it is now considered a favour and privilege in Pakistan!. These tactics are not new; every ruling elite indulges in these kinds of policies and tactics to protect its vested interest (of course Zadari and Gillani, Nawaz and Shahbaz et al are not ready to surrender their assets to public) and make people fool in the name of self-defined “national interests”. At this critical juncture of history, it is the people of Pakistan who will have to decide their fate. If they once again fail to force Musharraf to step down and force their elected members to work for public welfare rather than self-aggrandizement, no one will be able to avert a long and dark period of subjugation that renders a nation neither amongst the dead nor alive—the worst possible punishment history can inflict on apathetic people.

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The writers (ikram@huzaimaikram.com), tax advisers, legal historians and authors, are visiting Professors of Lahore University of Management Sciences (LUMS).

Causes behind Graet Divide

May 4, 2008

Huzaima Bukhari & Dr. Ikramul Haq

Political economy is the theory of wealth and of how wealth is created and shared out in society. Its key concepts are production, distribution, exchange, and consumption. Historically, political economy is a response to the rise of capitalism and capitalist society. Its concepts are refined, redefined and added to as capitalism progresses from the mercantile or merchant capitalism of the sixteenth and seventeenth centuries, to the agricultural and manufacturing capitalism of the eighteenth century, to the industrial capitalism of the nineteenth century, from rise of unipolar world power, to quest for monopolies in the 21st century.

In the 1790s, when “the labouring poor” become a major issue, economics begins to divide along partisan lines. Bread riots and the actions of “the mob” defend, in the words of the historian E. P. Thompson, a “moral economy” of customary rights, fixed prices, and the right to subsistence. While accepting the free market, Tom Paine advocates a programme of social services (family allowances, old age pensions, maternity benefits, workshops for the unemployed) in his Agrarian Justice (1795). In Pakistan even in 2008 these are missing! More radical is Thomas Spence’s Pig’s Meat (1793-5): private property in land is the root of all social ills, and people are urged to take the land into their own hands by force. On the other side, speaking as a commercial farmer, Edmund Burke in his Thoughts and Details on Scarcity (1795) defends laissez-faire, claiming that the “labouring people are only poor, because they are numerous”, that labour “is a commodity like every other, and rises and falls according to demand”, that wage-labour should be subject to the laws of the market, and that to force a farmer to pay his labourers a minimum wage is “but to make an arbitrary division of his property among them”.

Thomas Malthus in his Essay on the Principle of Population (1798) claims that population has a “constant tendency to increase beyond the means of subsistence” and that the existing poor laws, by encouraging labourers to have even larger families, are an incentive to idleness. The perfectibilitarians and meliorists are therefore deluded. Together Malthus’s “law of population”, the laissez-faire economics of Smith and Ricardo, and the utilitarian philosophy of Bentham encouraged an assault on outdoor relief to the able-bodied poor, leading to the abolition of the old Elizabethan poor laws in the Poor Law Amendment Act of 1834.

A socialist political economy emerges in Charles Hall’s The Effects of Civilization (1805), which announces a theory of exploitation. It continues in the writings of Thomas Hodgskin, in John Gray’s The Social System (1831), and in John Francis Bray’s Labour’s Wrongs and Labour’s Remedy (1839) which calls for workers’ cooperatives. Writing to Francis Place in 1818, Hodgskin states that capital “is merely the saving of labour” and of itself “produces nothing”. All the capitalist offers is his “power to command those necessaries of life, which are necessary to the workman while he produces something which is sufficient to replace what he has consumed during the time of producing and to leave an overplus for the capitalist”. In Labour Defended against the Claims of Capital (1825) he draws on Ricardo’s labour theory of value to show that wealth is produced by living labour, that circulating capital (wages) comprises no “stored-up stock of commodities”, and that fixed capital (tools, machines, etc.) remains useless and inert without living labour. In his Popular Political Economy (1827), he regrets that “sentimentalists” have decried political economy as “repugnant to the impulse of the heart” when, if it is a science, there can be no reason to despise it.

Marx’s Contribution to a Critique of Political Economy (1859) was followed in 1867 by the first volume of Capital. For Marx, bourgeois political economy fails to analyse the way in which the capitalist mode of production alienates the workers not only from the means of production, but from what they produce. Under conditions of capitalist competition, the commodity becomes a mysterious thing. This, says Marx, is “because in it the social character of men’s labour appears to them as an objective character stamped upon the products of that labour; because the relation of the producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves, but between the products of their labour”. Thus, “a definite social relation between men” assumes, from their point of view, “the fantastic form of a relation between things”. In this topsy-turvy world, those who produce the wealth are unaware of their productive powers and of their relations with each other as workers. They relate to each other through that which is alien to them, namely the market, where their products are bought and sold. Thus the relations “connecting the labour of one individual with that of another appear, not as direct social relations between individuals at work, but as what they really are, material relations between persons and social relations between things”. Alienation, reification, and what Marx calls the “fetishism of commodities”, where the products of physical and mental labour appear to take on a life of their own, are part of Marx’s fundamental critique of an alienating, dehumanising economic system.

Study of Pakistan from this political economy perspective is very crucial as our society is moving towards a dehumanising characteristics unfettered and unchallenged. We are facing economic disparities, starvations, scarcity of eatables, and lack of essentials services. The Great Divide in today’s Pakistan is between the rich and the poor. The wealth of the nation is confined to a few families. The burden of taxes is increasing on the less privileged classes and the rich are not even ready to share a very negligible portion of their collossal wealth with the have-nots. The Election Commission of Pakistan has released a few reports in the past revealing the declaration of assets and liabilities of the elected members of parliament. Interesting, we still have no public disclosure of assets of top military brass, honourable judges and grade 21and 22 civil bureaucrats.

 

Looking at the Press reports, it is disbursing to see that some of our retired generals adjudged as the richest in the world by TIME magazine. Our elected representatives in the past proved that are far better at asset and wealth management than the fund managers and investment bankers of Pakistan. These people are extremely good at creating personal wealth but too bad to increase national wealth for the 160 million people of this country. The rich Prime Minister cum Finance Minister did not establish any charitable institute by giving donation out of his mega wealth. On the contrary, the National Police Foundation “allotted” two plots to him in E/11, Islamabad at through away prices of Rs. 1.1 million and Rs.0.24 million, which within a year time attained market price of Rs. 12.5 million and Rs. 1.5 million and now ten times the original price paid! Supreme leader of King’s party Chaudhry Shujaat Hussain is another exceptional wealth manager who had jump from net wealth of Rs. 74 million to Rs146 million just in 12 months. These two examples are just illustrative of the over all pattern of phenomenal increase in the wealth of ruling elite: powerful civil-military complex, greedy politicians and unscrupulous businesspersons.

 

According to a study conducted by the Centre for Research on Poverty and Income Distribution (CRPID), there are 63% of poor in Pakistan in the category of ‘transitory poor’. The State Bank of Pakistan (SBP) also admitted this fact saying in its annual reports that the standard definition of ‘transitory poor’ includes those households that are below the poverty line for most of the time but not always during a defined period. The rest of 32% and 5% of the population that subsist below the poverty line have been found to be ‘chronic’ and ‘extremely poor’, respectively. Chronic and extremely poor are households that are always below the poverty line, all the time during a defined period. Similarly, on the other side, 13% and 21% of total non-poor (above the poverty line) were classified as ‘transitory vulnerable’ and ‘transitory non-poor’, respectively.  This portrays an alarming situation as more and more people are moving from transitory category to chronic category, courtesy inequitable distribution of wealth, unjust economic system and regressive tax policies. Rulers in Pakistan never showed any concern for redistributive economic and social justice as their political goal. One wonders if new government, badly trapped by the forces that matter in the land in various issues, is cognizant of this state of affairs and devising some practical means to overcome it.

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The writers (ikram@huzaimaikram.com), tax advisers, legal historians and authors, are visiting Professors of Lahore University of Management Sciences (LUMS).

 

Reality of “War against terrorism”

May 4, 2008

Huzaima Bukhari & Dr. Ikramul Haq

 

The newly-elected Prime Minister of Pakistan, Yousaf Raza Gilani, in an article published in Washington Post the other day, has vowed to continue war against terrorism, but “in our own way”. “Our strategy against global terrorism, he wrote, “will be multifaceted”. Mr. Gilani resolved that “Pakistan will not negotiate with terrorists, but it will not refrain from talking to insurgent tribesmen whose withdrawal of support could help drain the swamp in which terrorists fester and grow. Yet, no talks will be held with anyone refusing to lay down arms. He further elaborated that “Our policy aims to marginalise terrorists in the Federally Administered Tribal Areas and our North-West Frontier Province, where the rule of law had been abandoned and territory all but ceded to Al-Qaeda and the Taliban. Negotiations with the various tribes are being pursued with the help of the secular Pakhtoon nationalist Awami National Party, which has intimate knowledge of tribes and clans in the area and which, along with my Pakistan People’s Party, received the bulk of the votes of ethnic Pakhtoons in the Feb. 18 parliamentary elections”.

Our Prime Minister argued that “erroneous comparisons” had been made between the new government policy and the failed deals reached with tribal militants along the Pakistan-Afghanistan border in 2004 and 2006. He elaborated that those agreements were signed after militant groups bruised Pakistan’s security forces in battle. “Now we are negotiating from a position of strength. Militants have been asked to surrender their weapons and unequivocally give up violence. We will not cut off our ability to use force or lower the vigilance we maintain to guard against violations of the peace agreements”, he added. “We intend to restore order and to give the people an option other than collaborating with murderers whose sole goal is chaos and anarchy. We will welcome our tribes back into society while respecting their conservative interpretations of Islam, as long as they give up violence and refuse to acquiesce to the intimidation of terrorists”, Mr. Gilani added.

Over six years have lapsed after the wanton attack on New York’s twin towers, symbols of America’s economic might, but the world is still waging ‘war on terrorism’ (sic) and searching for  a lasting peace. The perpetuation of terrorism since then and manhandling of the entire issue by United States and its allies has posed serious threat to international peace as evident from 7/7 brutal attacks in London and elsewhere. In the name of fighting terrorism certain proponents of “peace”, “democracy” and champions of human rights are colonizing oil and mineral rich countries, conspiring to topple some “unwanted” governments and lending support to drug trade and mass acceptance of fascism in the name of reforming the world. Our worthy Prime Minister has not pondered in depth before devising a strategy to start a fresh initiative on this front.

As reported in The Economist of London, there is growing tension between two US objectives in Afghanistan. The main thrust of US Afghan policy in the wake of 9/11 has been elimination of remaining apparatus of Al Qaeda and Taliban forces. But the US and its coalition partners are now emphasizing on eradication of drug trade in Afghanistan. These anti-drug efforts are fatally undermining the anti-terrorism campaign as drug baron and terrorists are joining hands in Afghanistan against US and its allies.  As long as the United States and other drug-consuming countries pursue a prohibitionist strategy, a massive black market premium exists that will make the cultivation of drug crops far more lucrative than competing crops in Afghanistan and other drug-source country. For majority of Afghan farmers, growing opium poppies is the difference between prosperity and destitution. They use those revenues to pay the militia that keep them in power. The ongoing drug eradication campaign of US and coalition partners is forcing important warlords into alliance with America’s terrorist adversaries.

It is a matter of record that much before 9/11, the US and its NATO allies decided to invade Afghanistan. The decision to this effect was taken in Berlin during the joint meeting of Council of Ministers held in November 2000.  It exposes the claims of US and coalition partners that 9/11 was the sole reason for invading Afghanistan. The actual cause was apprehensions regarding Turkmenistan Gas Pipeline Project in which powerful corporate entities, who actually rule US and other capitalist countries, had financial interests. It was not the existence of so-called Al-Qaeda in Afghanistan that forced US and its allies to invade Afghanistan but “financial terrorism” of US and its blind allies was the main cause of action. Till the said time Al Qaeda was a weapons in the hands of US policymakers to put pressure on Islamic States having enormous oil, gas and mineral wealth to toe its line and extend financial benefits uninterruptedly.

It needs to be remembered that President Bush appointed former aide to the American oil company Unocal, Afghan-born Zalmay Khalilzad, as special envoy to Afghanistan nine days after the US-backed interim government of Hamid Karzai took office in Kabul. This appointment underscored the real economic and financial interests at stake in the US military intervention in Central Asia. Khalilzad was intimately involved in the long-running US efforts to obtain direct access to the oil and gas resources of the region, largely unexploited but believed to be the second largest in the world after the Persian Gulf.

As an advisor for Unocal, Khalilzad drew up a risk analysis of a proposed gas pipeline from the former Soviet republic of Turkmenistan across Afghanistan and Pakistan to the Indian Ocean. He participated in talks between the Oil Company and Taliban officials in 1997, which were aimed at implementing a 1995 agreement to build the pipeline across western Afghanistan. Unocal was the lead company in the formation of the Centgas consortium, whose purpose was to bring to market natural gas from the Dauletabad Field in southeastern Turkmenistan, one of the world’s largest. The $2 billion project involved a 48-inch diameter pipeline from the Afghanistan-Turkmenistan border, passing near the cities of Herat and Kandahar, crossing into Pakistan near Quetta and linking with existing pipelines at Multan. An additional $600 million extension to India was also under consideration. Khalilzad also lobbied publicly for a more sympathetic US government policy towards the Taliban. Four years ago, in an op-ed article in the Washington Post, he defended the Taliban regime against accusations that it was a sponsor of terrorism, writing, ”The Taliban does not practice the anti-U.S. style of fundamentalism practiced by Iran.”

”We should… be willing to offer recognition and humanitarian assistance and to promote international economic reconstruction,” he declared. ”It is time for the United States to reengage” the Afghan regime. This ”reengagement” would, of course, have been enormously profitable to Unocal, which was otherwise unable to bring gas and oil to market from landlocked Turkmenistan.

Khalilzad only shifted his position on the Taliban after the Clinton administration fired cruise missiles at targets in Afghanistan in August 1998, claiming that terrorists under the direction of Afghan-based Osama bin Laden were responsible for bombing US embassies in Kenya and Tanzania. One day after the attack, Unocal put Centgas on hold. Two months later it abandoned all plans for a trans-Afghan pipeline. The oil interests began to look towards a post-Taliban Afghanistan, and so did their representatives in the US national security establishment.

Born in Mazar-e Sharif in 1951, Khalilzad hails from the old ruling elite of Afghanistan. His father was an aide to King Zahir Shah, who ruled the country until 1973. Khalilzad was a graduate student at the University of Chicago, an intellectual center for the American right-wing, when the Soviet Union invaded Afghanistan in 1979. Khalilzad became an American citizen, while serving as a key link between US imperialism and the Islamic fundamentalist Mujahideen fighting the Soviet-backed regime in Kabul — the milieu out of which both the Taliban and Bin Laden’s Al Qaeda group arose. He was a special advisor to the State Department during the Reagan administration, lobbying successfully for accelerated US military aid to the Mujahideen, including hand-held Stinger anti-aircraft missiles which played a key role in the war. He later became undersecretary of defense in the administration of Bush’s father, during the US war against Iraq, and then went to the Rand Corporation, a top US military think tank.

After Bush was installed as president by a 5-4 vote of the US Supreme Court, Khalilzad headed the Bush-Cheney transition team for the Defense Department and advised incoming Defense Secretary Donald Rumsfeld. Significantly, however, he was not named to a sub-cabinet position, which would have required Senate confirmation and might have provoked uncomfortable questions about his role as an oil company advisor in Central Asia and intermediary with the Taliban. Instead, he was named to the National Security Council, where no confirmation vote was needed. At the NSC Khalilzad reports to Condoleezza Rice, the national security advisor [now US Secretary of State] who also served as an oil company consultant on Central Asia. After serving in the first Bush administration from 1989 to 1992, Rice was placed on the board of directors of Chevron Corporation and served as its principal expert on Kazakhstan, where Chevron holds the largest concession of any of the international oil companies. The oil industry connections of Bush and Cheney are well known, but little has been said in the media about the prominent role being played in Afghan policy by officials who advised the oil industry on Central Asia.

One of the few commentaries in the America media about this aspect of the US military campaign appeared in the San Francisco Chronicle on September 26, 2001. Staff writer Frank Viviano observed: ”The hidden stakes in the war against terrorism can be summed up in a single word: oil. The map of terrorist sanctuaries and targets in the Middle East and Central Asia is also, to an extraordinary degree, a map of the world’s principal energy sources in the 21st century…. It is inevitable that the war against terrorism will be seen by many as a war on behalf of America’s Chevron, Exxon, and Arco; France’s TotalFinaElf; British Petroleum; Royal Dutch Shell and other multinational giants, which have hundreds of billions of dollars of investment in the region.” This reality is well understood in official Washington, but the most important corporate-controlled media outlets — the television networks and major national daily newspapers — have maintained silence that amounts to deliberate politically motivated self-censorship.

The sole exception was an article which appeared December 15, 2001 in the New York Times business section, headlined, ”As the War Shifts Alliances, Oil Deals Follow.” The Times reported, ”The State Department is exploring the potential for post-Taliban energy projects in the region, which has more than 6 percent of the world’s proven oil reserves and almost 40 percent of its gas reserves.” The Times noted that during a visit in early December to Kazakhstan, ”Secretary of State Colin L. Powell said he was particularly impressed’ with the money that American oil companies were investing there. He estimated that $200 billion could flow into Kazakhstan during the next 5 to 10 years.” Secretary of Energy Spencer Abraham also pushed US oil investments in the region during a November visit to Russia, on which he was accompanied by David J. O’Reilly, chairman of ChevronTexaco.

Former US Defense Secretary Rumsfeld has also played a role in the ongoing oil pipeline maneuvers. During a visit to Baku, capital of Azerbaijan, he assured officials of the oil-rich Caspian state that the administration would lift sanctions imposed in 1992 in the wake of the conflict with Armenia over the enclave of Nagorno-Karabakh. Both Azerbaijan and Armenia aligned themselves with the US military thrust into Central Asia, offering the Pentagon transit rights and use of airfields. Rumsfeld’s visit and his conciliatory remarks were the reward. Rumsfeld told President Haydar Aliyev that the administration had reached agreement with congressional leaders to waive the sanctions. The White House released a statement hailing the official opening of the first new pipeline by the Caspian Pipeline Consortium, a joint venture of Russia, Kazakhstan, Oman, ChevronTexaco, ExxonMobil and several other oil companies. The pipeline connects the huge Tengiz oilfield in northwestern Kazakhstan to the Russian Black Sea port of Novorossiysk, where tankers are loaded for the world market. US companies put up $1 billion of the $2.65 billion construction cost. The Bush statement declared, ”The CPC project also advances my Administration’s National Energy Policy by developing a network of multiple Caspian pipelines that also includes the Baku-Tbilisi-Ceyhan, Baku-Supsa, and Baku-Novorossiysk oil pipelines and the Baku-Tbilisi-Erzurum gas pipeline.” There was little US press coverage of this announcement. Nor did the media refer to the fact that the pipeline consortium involved in the Baku-Ceyhan plan, led by the British oil company BP, is represented by the law firm of Baker & Botts. The principal attorney at this firm was James Baker III, Secretary of State under Bush’s father and chief spokesman for the 2000 Bush campaign during its successful effort to shut down the Florida vote recount”.

The subsequent invasion of Iraq by US and its allies using the myth of weapons of mass destruction [which proved to be a hoax] and appointment of Zalmay Khalilzad as US Ambassador later on proved beyond any doubt that the reality of ‘war on drug’ is nothing but quest for OIL. Donald L. Barlett and James B. Steele [TIME, May 19, 2003] remarkably exposed the dark side of American oil policy from classified government documents and oil industry memos, involving a pair of Iraq’s neighbours, Iran and Afghanistan. The aim of controlling Iranian oil forced Americans for 25 years to spend more than $20 billion in U.S. taxpayers’ money as military aid and subsidized weapons sales for the Shah’s most undemocratic rule, its oppressive armed forces and ruthless intelligence apparatus SAVAK. These policies lead to takeover of Iran by anti-U.S forces in 1979. Resultantly for two decades, American oil companies were barred by the U.S. government from doing business with Iran.

 

In Afghanistan the story was even more bizarre as in 1977 the CIA “sounded an alarm on the Soviets’ faltering energy prospects in a secret 14-page memo titled: The Impending Soviet Oil Crisis.” President Jimmy Carter, in the wake of Soviet invasion of Afghanistan, concluded that the Soviet Army was passing through Afghanistan to seize the Middle East oil fields and “any outside attempt to gain control of Persian Gulf region will be regarded as an assault on the vital interests of the United States of America…” Soon after Reagan took office the CIA began one of its largest, longest and most expensive covert operations, “supplying billions of dollars in arms to a collection of Afghan guerrillas fighting the Soviets. The arms shipments included Stinger missiles, the shoulder-fired, anti-aircraft weapons that were used with deadly accuracy against Soviet helicopters and that are now in circulation among terrorists who have fired these weapons at commercial airliners. Among the rebel recipients of U.S. arms was Osama bin Laden, who is now considered as Enemy No.1 in ‘war against terrorism’.

 

At the same time the U.S. was moving into the Persian Gulf militarily and supplying Afghan rebels, all based on a faulty CIA oil assessment, it was also secretly supporting Saddam Hussein…in 1982 when the State Department removed Iraq from its list of countries supporting terrorism….The root of all this folly was the U.S. government’s officially sanctioned version of faltering Soviet oil production, which was at odds with reality…In fact, Russia today is the world’s second largest [oil] producer, after Saudi Arabia. Instead of becoming a major buyer of Middle East oil, as the CIA had warned, Russia ships 3 million bbl. a day to other countries, including the U.S.

 

As all this makes clear, the former Soviet Union was not running out of oil. Neither is the world. The one exception: the U.S., which was the Saudi Arabia of the first half of the 20th century, is finally running out. As a result, thanks in part to American policy that put an emphasis on foreign intervention rather than domestic conservation, American are more dependent than ever on imported oil.

 

The second myth that Taliban was not able to effectively curb poppy cultivation and drug trade is equally false. According to The Economist (August 16-22, 2003), the Taliban regime clamped down on poppy growing with an iron fist, and banned it completely in 2000. Production collapsed from its peak of over 4,500 tonnes in 1999 to 185 tonnes in 2001. However, the ban did not cover trade, and opiates kept on flowing into Central Asia. After demise of the Taliban, poppy cultivation re-appeared with a vengeance, in spite of a fresh ban issued by U.S.-installed Hamid Karzai’s government. According to UN estimates [United Nations Office on Drugs and Crime] production increased to 4,500 tonnes in 2004. Afghanistan once again dominates world production of opium, with almost three-quarters of the total annual global yield. About 80% of Afghans depend on what they can grow. But Afghanistan lacks water and cultivable land. Even in the halcyon 1970s, less than 5% of the land was irrigated. The war halved that. Then during the seven-year-long drought in some places, most of the livestock died and staple crops failed. In the south and south-west of the country, water-tables are dangerously low. Even with the best possible governance, that part of Afghanistan is a poor proposition.

In post-Taliban Afghanistan, drought, drugs and insecurity have started to feed off each other. Three of the country’s five big drug-producing provinces – Helmand, Uruzgan, and Kandhar – are unsafe and parched. Poppy cultivation is spreading to new areas, and with it insecurity. The nightmare is a new Colombia: a place where drug lords capture and wreck governments and the economy alike. The drug trade in the post-Taliban Afghanistan is becoming institutionalized. Opium is now being processed into morphine and heroin inside Afghanistan. That means a lot more money for commanders on the ground, something made apparent by the switch to ever more expensive jeeps. Democracy plays into the hands of more sophisticated naro-enriched commanders.

America could have played a useful role by acknowledging and supporting the efforts of Iran – whose policy on drugs is in many ways more intelligent – and by cracking down on (rather than supporting) warlords and commanders, its special forces know to be, trafficking opium. However, the American stance is diametrically opposite. It is levelling baseless allegations against Iran. It unveils the hidden agenda of U.S in Afghanistan and elsewhere to promote drug trade, religious fundamentalism and mass acceptance of its policies of fascism for its own self-interests and economic benefits of certain corporations in which the ruling elite has substantial interest.

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Huzaima Bukhari and Dr. Ikramul Haq (huzaimaikarm@gmail.com) are author of many articles and books on money laundering operations, tax frauds, narco-terrorism and socio economic problems concerning our present day international society.